All Forum Posts by: Jerry Mical

Near metro center

4bd 2 ba heavy renovation that I would house hack and rent by room for other three bedrooms @ ~600 a room (could maybe push to 700-750 range for this area)

Used 75% LTV to be conservative but have heard .8% LTV is achievable which could reduce my cash invested

This was my worst case scenario (of 3) which leaves me with 34k cash invested and a renovated 4bd/2ba in a growing area outside a metro center.

Please help me polk holes in my analysis/calculation. Any feedback is much much appreciated!
  

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Hi Jasmine!

I am interested in seeing the responses to this as I am debating between a SFH and a RBTR strategy for a house hack or looking for 1-4 unit MFs. The Charlotte market seems pretty tough for MFs right now.

If you don't mind me asking, what has been your RBTR experience thus far?

I found a HUD home in Louisiana that I am interested in touring while visiting for the Thanksgiving Holidays. Should I reach out to a realtor/broker with a HUD license (i.e. would become my buyer's agent) to tour the home or should I reach out to the seller agent on the listing? Don't want to go down the wrong path and haven't dealt with HUD homes before. Thanks in advance!

Mark, that is interesting to hear. I have wondered how STR does near the city as opposed to one in the mountains nearby. It seems logical that the demand for STR would be higher in the mountains, but also the supply would potentially be higher in the mountains as well. I probably have the wrong term here for STR, but what are you seeing for occupancy rates in a calendar year for STR in Mooresville?

Hi all!

I was doing some research into zoning laws and trying to grasp an understanding of everything. There was a house that is zoned R3 and it is a 4bd 2ba on .87 acres. Based on the "minimum lot area (sq ft)" chart that I am reading here for Charlotte (http://ww.charmeck.org/Plannin...) on Page 12, it appears I could turn this into a duplex as long as the minimum lot size is 16,000 Sq Ft. Based on .87 acres on the lot, I am calculating 30,000+ sq. ft. for the minimum lot size, meaning I would be able to properly convert this into a duplex, right? Also based on that zoning ordinance, it appears I would not be able to convert it into a triplex or a quadplex as those columns were empty in the chart. I am new to this stuff so I am making a few (likely incorrect) assumptions.

Assuming my understanding (and math) is correct and I would be able to convert this 4bd 2ba into a duplex, I would want to turn it into a two unit 2bd/2ba duplex or expand it to 3bd/2ba on at least one side. I feel like I am missing some key points that would not make this plan viable. Most likely, I am misunderstanding the zoning as this is the first time I have done deeper than surface-level research on zoning. Please provide any and all feedback. I look forward to the discussion and learning!

Side note, I thought of as I was about to hit submit - If the 30k minimum sq ft requirement is correctly calculated, could I have a duplex (16k min sq ft.) and add a detached dwelling (10k min sq ft.) also? Or is that not how the zoning works?

Best,

Jerry

 

Hi Natalie!

I am also a newbie in the real estate investing world and living in Charlotte. I am attempting to soak in as much knowledge as possible before making that first deal. All of those areas you mention are areas I would be interested in finding a property. Question on how the pre-market properties work: Is that something that would show up on the MLS? I recall there might be a 24hr period or something of the sort before it shows up on the MLS. Follow-up to that is if an investor is interested in the pre-market property, what would be the advantage - i.e. first to look at it? first to make an offer? etc...

Best,

Jerry

Thanks for the response. We have considered what the BRRRR strategy would look like if we three attempted it and I personally think we would need to handle it similarly to what I laid out above. The other option would be that we all need to put up capital if we want an even 33% split in order to match the risk and reward for us to split evenly.

This is an option, though I wanted to be on the loan to include my credit history and income for the debt-to-income ratio. If he can get approved high enough, I think it is a good idea to do exactly as you have laid out here.

Hello BP!

I am a new investor, though I have been perusing the BiggerPockets forums off and on for about two years now and have listened to 30+ BP podcasts.

My family and I have finally started to get the gears churning on buying our first investment property and I wanted to see what BP thinks about the equity structure we are debating on between our family members. I understand and read many articles of the pros and cons of partnering with family members and have ultimately determined we will trudge forward while trying to put in as many processes in place to protect our close family bonds while also protecting our investments. The equity structure discussion below is to try and be equitable to everyone for capital contributions/work contributions while also encouraging each partner to continue growing a portfolio of real estate investments.

Quick background on each member:

Parent: Has plenty of capital and wants to invest it; does not have the desire to be out finding deals, financing, rehabbing, etc. and lives in a small market with minimal real estate activity

Sibling: Has limited capital, time is somewhat tied up in multiple endeavors though sibling does want to provide some help in the day-to-day as time allows. Market will change as current job moves around to different states year-to-year. Best description is limited capital, limited time 

Me: Limited capital (more limited than sibling); lives in the hottest market (Charlotte) and would do most of the grunt work, research, deal finding, financing, etc.

Equity Structure per deal:

- 10% base for all three

- 23.3% for either capital contribution or performance of deal work

- When an investment is sold, the original capital contributions would be returned to contributors and the equity structure would determine the profit sharing

We would setup an LLC to hold investments of similar equity structures

If one partner does not participate in either capital contribution or performance of work, the other two partners would split the 23.3% unclaimed

Quick Example using basic number assumptions:

Parent puts in $50k capital to purchase $150k (w/100k mortgage) property and little time/work – 10% base + 23.3% + 11.65% = 45%

Sibling puts in $0 capital and little time/work – 10% base = 10%

I put in $0 capital and majority of time/work – 10% base + 23.3% + 11.65% = 45%

Parent puts in $25k in rehab costs

Property is sold for $250k - $100k mortgage is paid off, parent is returned $50k capital and $25k in rehab costs – profits of $75k are split $33.75k Parent, $7.5k Sibling, and $33.75K Me

Ideally, all three will be involved in all deals but this won't be our first or only obligation so there will be times when that won't be the case. I wanted to see if others in the BP forums have had similar experience and am interested to hear your advice on how to best achieve our desire to be equitable but to grow a portfolio together. I am sure I am overlooking some big points, so please give me your criticisms and feedback. Thanks!

Jon, 

You have been a wealth of knowledge. I truly appreciate you taking the time out to help a new investor. I still have plenty of research to do but you have helped steer me in the right direction. 

All the best,

Jerry